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The Politician and the Judge: Accountability in Government

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The Politician and the Judge: Accountability in Government The Politician and the Judge: Accountability in Government By ERIC MASKIN AND JEAN TIROLE* We build a simple model to capture the major virtues and drawbacks of making public officials accountable (i.e., subjecting them to reelection): On the one hand, accountability allows the public to screen and discipline their officials; on the other, it may induce those officials to pander to public opinion and put too little weight on minority welfare. We study when decision-making powers should be allocated to the public directly (direct democracy), to accountable officials (called “politicians”), or to nonaccountable officials (called “judges”). (JEL H1, H7, K4) The premise behind democracy is that public any case, they have greater incentive than the decisions should reflect the will of the people. citizen to try to do so. After all, in any large But in most democracies, comparatively few society, a lone citizen will have strong tempta- decisions are made directly by the public.1 tion to free-ride, since her chance of actually More often, the power to decide is delegated to affecting policy is almost negligible.4 representatives. And there is a good reason for Another potential advantage of representative this delegation: representatives are usually ex- government is that it reduces the risk of “tyr- pected to do a better job.2 As specialists in anny by the majority.” Noting the dangers of public decision-making, they are more likely direct democracy,5 Madison (1787) writes: “It than the average citizen to have the experience, is of great importance ... to guard one part of the judgment, and information to decide wisely.3 In society against the injustice of the other part. Different interests necessarily exist in different classes of citizens. If a majority be united by a * Maskin: Institute for Advanced Study, Einstein Drive, Princeton, NJ 08540, and Princeton University (e-mail: [email protected]); Tirole: Institut d’Economie Industrielle, Manufacture des Tabacs, Bureau MF529-Bat. F, 21 allees de Brienne, 31000 Toulouse, France, and GREMAQ (UMR Sie´ye`s (1789) (see also the introduction to Bernard Manin, 5603 CNRS), Toulouse, CERAS (URA 2036 CNRS), Paris, 1997). and MIT (e-mail: [email protected]). We are grateful to the 4 Joseph Schumpeter (1942) puts it in characteristically participants of the CEPR-ESF conference on “The Institu- acerbic fashion: “The average citizen expends less disci- tions of Restraint” (Toulouse, June 24–28, 2000), the An- plined effort on mastering a political problem than he ex- nual Meeting of the European Public Choice Society (Paris, pends on a game of bridge.” April 18–22, 2001), the Southeastern International Trade 5 Summarizing the case against direct democracy, David and Economic Theory Conference (Miami, November 16– Butler and Austin Ranney (1994, pp. 17–18) write: 18, 2001), the Canadian Economic Theory Conference (To- ronto, May 24–26, 2002), the Modeling the Constitution The main arguments against holding referendums in Conference (Pasadena, May 16–17, 2003), and many sem- representative democracies include: (1) ordinary cit- inars for their observations on oral presentations, and to izens have neither the analytical skills nor the infor- Mathias Dewatripont, John Matsusaka, Stephen Morris, Ian mation to make wise decisions; (2) decisions by Shapiro, and two anonymous referees for helpful comments elected officials involve weighing the intensity of on previous drafts. preferences and melding the legitimate interests of 1 Ballot referendums constitute the largest class of deci- many groups into policies that will give all groups sions made through direct democracy, but even in the something of what they want; (3) decisions made by United States and Switzerland, where they are especially representatives are more likely to protect the rights popular, they touch on only a small fraction of public policy of minorities; and (4) by allowing elected officials to issues. be bypassed and by encouraging officials to evade 2 See, however, the sympathetic 14-page survey on di- divisive issues by passing them on to the voters, rect democracy in The Economist (December 21, 1996). referendums weaken the prestige and authority of Many have argued that once the digital divide is eliminated, representatives and representative government. e-voting will enhance the appeal of referendums. 3 The view that governments are better informed than We have already touched on points (1) and (3), and these citizens is emphasized in James Madison (1787) and Abbe´ will figure prominently in our analysis. 1034 VOL. 94 NO. 4 MASKIN AND TIROLE: ACCOUNTABILITY IN GOVERNMENT 1035 common interest, the rights of the minority will “responsiveness,”8 it is in clear conflict with the be insecure.” rationale for representative democracy dis- But if representatives decide for the public, cussed above: that representatives can make what induces them to act in the public interest? better decisions than ordinary citizens.9 Further- In this paper we focus on two motivations in more, if minority rights are a concern, the abil- particular. ity to remove officials from office through First, we suppose that an official wishes to elections may give the majority too much power leave a legacy, i.e., she wants to be remembered to shape the government. for great things. Indeed, in our setup, it is not A constitution—a specification of who gets enough for the official that great things be done; to decide what—should strike a balance be- she wants to be the one who does them (al- tween these considerations. In this paper, we though we allow for the possibility that her compare constitutions from the standpoint of conception of what is “great” may differ from public welfare. We focus mainly on three dif- that of the average citizen, that is, she may be ferent modes for making decisions: (i) direct noncongruent with society).6 democracy, in which the public itself decides But the desire to use power to achieve certain through a referendum; (ii) representative de- ends is not the only motive we ascribe to the mocracy, in which an official subject to reelec- official. We also assume that she values being in tion (a “politician”) decides; and (iii) judicial office for its own sake, perhaps because she power, in which a nonaccountable official (a enjoys the perquisites that come with the job, “judge”) decides.10 We also show that, in our perhaps because she simply has a taste for wielding influence.7 The public can harness these two motives by 8 Opinions differed in the 1787 U.S. Constitutional Con- vention on the degree to which officials should be respon- making the official accountable, that is, by re- sive to public opinion. In this paper, however, we take the quiring her to run for reelection every so often. view of delegate George Clymer (see Charles Beard, 1913, Holding reelections creates two major potential p. 193), who wrote that “a representative of the people is benefits. First, it may induce an official who is appointed to think for and not with his constituents.” In otherwise inclined (because she is noncongru- doing so, we adopt the usual political-science definition of “representative democracy” as a system in which voters do ent with society) to act in the public interest. not instruct their representatives. The practice of instructing Because the electorate may not always be able representatives was widespread in the 18th century (e.g., to evaluate the official’s actions directly, this deputies to the Estates General in France, American states can be called the “moral-hazard-correcting” before the 1787 Constitution). The modern version of rep- resentative democracy gained acceptance in the 18th cen- benefit of accountability. Second, reelections tury in England, and with the 1787 Constitution in the may allow the electorate to “weed out” the United States and the 1789 revolution in France. See Manin noncongruent officials altogether. This can be (1997, Ch. 5) for more details. viewed as the “adverse-selection-correcting” 9 Received theories of democracy in political science, effect. e.g., Robert Dahl (1956), often stress the importance of repeated elections for making government responsive to the But accountability also carries with it two public. We argue that “moral-hazard-correcting” respon- serious possible drawbacks. In order to get re- siveness is beneficial, whereas simply carrying out what the elected, an official may choose an action, not public wants can be counterproductive. because it is right for society, but because it is 10 We use the term “judicial power” to refer to non- accountable officials because, in most democracies, popular. That is, she may pander to public opin- judges—at least, at the highest levels—are appointed rather ion. Although some might call such pandering than elected. In the United States, for example, all federal judges are appointed and with lifetime tenure. Most of what we say about “judges,” however, applies equally well to appointed government bureaucrats whose tenure is not ap- 6 For example, the “great things” she does might consist preciably affected by their actions. of favors for a particular interest group, in which case her Interestingly (and consistent with the theory developed legacy benefits could include what the interest group does here) elected judges in the United States appear to “pander” for her in return. more (and thus behave more like politicians) than their 7 The desire to hold office is a commonly assumed appointed counterparts. Specifically, Timothy Besley and motive in the political economy literature dating back to Abigail Payne (2003) analyze employment-discrimination Robert Barro (1973) and John Ferejohn (1986). It is our cases and find that in states where judges are subject to legacy motive that is nonstandard (although, we believe, reelection discrimination charges are filed at a higher rate. quite realistic). They attribute this finding to an incentive rather than a 1036 THE AMERICAN ECONOMIC REVIEW SEPTEMBER 2004 admittedly extremely simple basic model, the feedback” case we show, in Section III, subsec- welfare-maximizing constitution generally re- tion A, that the comparison of our three modes duces to one of these three modes (or a combi- of government turns on the strength of officials’ nation thereof).
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